Various Capital New World entities have been steady large holders for over a decade, in Merck (and in legacy Schering-Plough as well). During the year 2014, they inched upward, almost touching the six per cent of outstanding mark once again (click image at right to embiggify!).

I suppose it is also significant (and encouraging) that they’ve actually added nearly 1.8 million Merck shares — to their holdings. Still not back to the 2010 high water mark levels, but moving in the right direction, certainly. From the just filed SEC Schedule 13G amendment, then:

I post this not because it should in any way reflect upon the current “new” Merck, and its generally hard-working, ethical, honest and very capable team of employees and officers, worldwide. [No. . . this is just a sad reminder of the CEO Fred Hassan-led past, only.]

I post it to complete the record — and close this unfortunate chapter out. It seems that the last of the 2008-2010 era inside trading ex-SGP (and, to a lesser extent, ex-MRK) employees will be sentenced on an agreed plea later this month. Here is some of the background (do search “insider trading“, in my search bar, center tab, above — for the full 20-plus posts download), and here is a Reuters story on the rumored plea, from earlier this week:

. . . .A former Merck & Co Inc finance analyst plans to plead guilty to engaging in an insider trading scheme by tipping a former Bank of New York Mellon Corp employee about potential pharmaceutical mergers, his lawyer said on Monday.

Zachary Zwerko is in the process of negotiating a plea agreement to resolve the conspiracy and securities charges he faces, his lawyer, Jeffrey Denner, confirmed after a court hearing in Manhattan federal court. . . .

More local 2010 color here. May the passion of St. Valentine burn brightly – for all of us, today!

I’ll likely come back to offer some more detailed analysis and background here, late tomorrow — but I’m too tired tonight to go through all of it. Very early start tomorrow. . .

For now, just accept that this is a significant part of the forecasted currency headwind most US multinationals expect, if they do business in Venezuela, amid an economy experiencing plummeting oil field revenues, this year. Venezuela proposes a new three tier system for trading currencies in country. It is an improvement over the prior systems, but like all the others before it, this one is byzantine — and only quasi-market driven. [So, Merck will suffer the same vagaries here that BMS, Pfizer and Abbott and Lilly will.] Here is a bit from the Business Recorder:

. . . .”This third mechanism is open, free, in which bidders and buyers exchange offers,” Marco said during a press conference with [Venezuelan] Central Bank President Nelson Merentes. The currency controls have been providing US dollars at three different rates: 6.3 bolivars for food and medicine, and two complementary rates of around 12 bolivars and 52 bolivars for other goods through systems known as Sicad I and Sicad II. But dollars fetch nearly 190 bolivars on the black market, according to widely referenced website dolartoday.com.

Marco and Merentes did not offer details on what the open rate would be when the market kicks off in coming days. Brokerage sources consulted by Reuters say the rate could begin at around 120 bolivars, substantially lower than the black market but still more than double the lowest existing rate.

The Sicad I auction system will continue to hold periodic auctions for specific sectors of the economy and will for the moment continue providing dollars at the rate of 12, Marco said. The new Simadi market will replace the Sicad II rate. Investors generally interpret devaluations positively because they leave the government with more hard currency available to service debt. Venezuelan bonds, which have been trading at distressed levels on fears of a possible default, were up across the board on Tuesday, with yields on several dropping to one-month lows. . . .

. . . .Approximately 4,500 specialists and general practitioners who were surveyed noted that between 25% and 30% of their patients expressed confusion, anxiety or unease about the move. About half of the doctors indicated they expected patients to stop taking their medication and 69% felt that patients who were doing well on Januvia should have been excluded from the change in coverage.

The survey, however, is causing its own ruckus.

“Obviously, we have concerns about this survey conducted and supported by Merck in terms of its lack of objectivity and the fact that physicians had a very small response rate, and physicians were paid to respond, and [there was] a failure to really disclose a connection between the surveyors and the drug company,” Terry Lake, the health minister in British Columbia, tells The Vancouver Sun. “We feel the survey is really a lobbying effort on the part of a large pharmaceutical company. . . .”

John Kean Jr. (depicted at top, right), a scion of the Kean family, has filed a motion to intervene in the recently decided legacy Schering-Plough Union facility property ownership suit.

The trial court judge issued an opinion last month granting the Russo entities the right to develop the property, and close their pending purchase transaction from Merck (as successor to legacy Schering Plough, here). Last week, the Kean University interests filed a motion for reconsideration, under explicit instructions from the University’s President, Dawood Farahi (depicted to the left of Mr. Kean, above).

Now President Farahi has enlisted the aid of the Kean family member who — it is claimed, at least — properly exercised the nearly century old right of first refusal, to re-acquire the parcel, under the provisions of (again, putatively) a 1925 trust agreement and last will of the current Mr. Kean’s grandfather. So, perhaps as early as tomorrow, Mr. Kean the younger could be heard, on his motion to intervene. Here is the Union News Daily’s report, of this morning — on these latest maneuvers:

. . . .Less than two weeks after Kean University filed a motion for reconsideration with the court to overturn a ruling saying they had no legal claim to the 50-acre Merck property, John Kean filed a motion with the court to be a part of the university’s fight to reclaim the land.

Kean, a surviving heir of the original owners of the property that includes Merck and other land fronting Morris Avenue, filed the lawsuit late last week with the expectation his plea would be heard as early as tomorrow before the same judge that ruled the university had no claim on the property. . . .

The motion to intervene is a legal move or application to the court that permits a person with an interest, or claim of interest, to become a part of a lawsuit that could “impede or affect that interest.”

While complex, the move by John Kean is significant because he is seeking to actually become a defendant in the motion for reconsideration the Kean Board of Trustees filed two weeks ago. This motion requested that Superior Court Judge Katherine Dupuis reconsider her ruling of January 5, 2015. . . .

Of course, Union’s mayor has blasted this latest gambit, as a potential taking of much needed tax funds from the public coffers here. We will keep you informed.

So, back in mid-January 2015, the ever-perceptive and savvy pharma-writer John Carroll, over at FierceBiotech, noted that this once hailed, then derided class of purported cholesterol medicine candidates might make a comeback, of sorts. Or, at least, Roche’s version might — as a targeted therapy for patients with the right genetics. So, Roche is potentially rethinking dalcetrapib, as a “personal genomics” driven cardio-protector? That’s pretty. . . unusual, to say the least — given the very rocky road the CETP class has traveled (and slid head-long off the side of the mountain, actually), in larger studies (and recall Pfizer’s much-earlier flame-out).

And now, just a few hours ago, John LaMattina, a Merck alum writing at Forbes, has highlighted Roger Perlmutter’s emerging view — that Merck’s ongoing large (30,000 patient) CETP candidate study will read out in late 2017/early 2018 with an actual edge — driven by lowered LDL (i.e., not the mechanism expected). Either way, Merck will have easily spent $500 million on the study. And in a class where Pfizer saw increased mortality in the early part of the last decade. Upshot? This game is decidedly not for “the faint of. . .” um. . . heart. Rim-shot. I think, just like with IMPROVE-IT, the effect will be only slight improvement — and may not translate to in-office visit benefits sufficient to justify the perhaps 100 fold price multiple, over generic statins. But we shall see.

So, back to John Carroll’s Roche musings, then — about personal genomics, and Roche’s dalcetrapib (nice twist!):

. . . .Back in the spring of 2012, Roche was forced to scrap its closely watched cholesterol drug dalcetrapib, a bitter setback that forced the company to start re-evaluating the entire R&D process while raising questions about the entire class. But now scientists in Canada say they have drilled down into the massive data files from the development effort and found that a subset of patients with the right genetic profile benefited greatly from the drug. They’ve published their results in Circulation: Cardiovascular Genetics. And now they plan to follow up with a new study in an effort to revive the long-dead drug. “These results will lead to a genetics-guided clinical study in patients with the appropriate genetic background to allow review by health regulatory agencies and to provide personalized therapy with dalcetrapib. . . .

As I wrote in 2010, Merck’s Anacetrapib had shown (at least at that stage of the game) considerably better lab results than Roche had, with its CETP candidate. There is no suggestion, however, yet — that the enhanced genomics-differentiated effectiveness will appear in Merck’s study results. Wow. So, even if this all pans out, both Roche and Merck will face a population — by 2018 — that has been on statins (at perhaps one-one hundredth the price) for seven to ten years, and is seeing real benefit from that course of therapy. It is not at all clear (except perhaps in the sub-class of patients with perfectly matched genomics), why a doctor would be willing to switch his or her patient to this undoubtedly much, much more expensive alternative.

But here’s to hoping — hoping that Dr. Perlmutter is right, and I am wrong. Or, as Mr. LaMattina has put it: “. . .Merck is not putting any credence in the potential for the HDL elevating properties of anacetrapib for reducing cardiovascular risk. They are resting all their hopes on the enhanced LDL cholesterol lowering capacity of anacetrapib which, when combined with a statin, is superior to a statin alone. Who would have ever thought that a CETP program would be viewed as an LDL lowering approach?. . . .”

Indeed, who? I must confess, all of this does feel just a bit like an episode from the later seasons of The Walking Dead. Just rehashing the mayhem, perhaps. . . but I do like the idea of a genomics-tailored approach to heart medications. I wonder how many patients will potentially fit dalcetrapib’s genetic marker profile(?). Will it be in the low thousands, or the low millions? Or somewhere in between? We shall see, in time. In time. . .

Nearly exactly as I guessed last week, the estimate out of Kenilworth for full year 2015 currencies-related down draft — at the revenue line — will be between 7 and 8 per cent. That is an effect not seen in this magnitude since the early part of the last decade. [Graphics momentarily.] And while Merck’s very substantial foreign asset base footprint (a pin-cushion full of plants and facilities, dotted around the globe) provides a “natural hedge” of sorts, it is not remotely a tightly-matched hedge. It is fuzzy, and lumpy – all over.

So, while Ketyruda®‘s expanding fortunes are likely to be a particularly bright story in 2015 for Kenilworth (moderated by BMS’s Opdivo® actually pulling into the market lead position here, in the latter part of 2015), the trick will be to protect as much of that currency affected sales line volume — and drag the bulk of it to the GAAP EPS bottom line, unimpaired. Mr. Davis has his work cut out for him. Here then, is the salient part of the forward-looking statements in this morning’s Q4 2014 earnings release:

. . . .Merck expects its full-year 2015 non-GAAP EPS range to be between $3.32 and $3.47, including a $0.27 negative impact from foreign exchange. The range excludes acquisition- and divestiture-related costs and costs related to restructuring programs. Merck expects its full-year 2015 GAAP EPS range to be between $1.62 and $1.91.

At mid-January 2015 exchange rates, Merck anticipates full-year 2015 revenues to be between $38.3 billion and $39.8 billion, including a $2.6 billion negative impact from foreign exchange and approximately $1 billion of net lost sales from acquisitions and divestitures.

In addition, the company expects full-year 2015 non-GAAP marketing and administrative expenses to be below 2014 levels and R&D expenses to be modestly above 2014 levels.

The company anticipates its full-year 2015 non-GAAP tax rate will be in the range of 22 to 23 percent, not including a 2015 R&D tax credit. . . .

The extremely strong US dollar should make things interesting in 2015. That — along with diving crude oil prices, globally — will make it difficult to effectively and economically hedge these exposures. Even so, I expect consumers to spend — in a discretionary fashion — much of the additional perhaps $40 a week they will now not be dumping into their gas tanks. That is cyclical spend, mostly — but may benefit Merck — as people choose to schedule doctor visits and well-care, and buy meds, more frequently.

UPDATE: Apparently (FierceBiotech has it!) Merck’s latest Hep C candidate is no longer a breathrough according to FDA — due to other on market meds. Not material — but I’ve never seen a “de-designation” personally, before.

It enters a crowded field, and does so as a Schedule IV psychoactive agent (read: lots of extra record keeping, and lock up precautions — at the dispensing point). I’m not sure it will ever reach $500 million in sales. We shall see.

. . . .The recommended dose of BELSOMRA is 10 mg, taken no more than once per night and within 30 minutes of going to bed, with at least 7 hours remaining before the planned time of awakening. The total dose should not exceed 20 mg once daily.

BELSOMRA is contraindicated in patients with narcolepsy. BELSOMRA contains suvorexant, a Schedule IV controlled substance. BELSOMRA can impair daytime wakefulness. Central nervous system (CNS) depressant effects can last for up to several days after discontinuation. . . .

At the FDA Advisory Committee around last Valentine’s Day, there was great concern about the heavier doses. . . so it enters with a low initial dose, which makes it only slightly different, in most prescribers’ minds, I think — than all the other sleep prescriptions already on market. But I could be wrong. In fact, I hope I am. [Here’s more background on this oft’ delayed US launch.] Onward, out into the . . . snow.